Producers across the country are the most pessimistic about the farm economy since the early days of the COVID-19 pandemic.
That’s the word from the most recent Ag Economy Barometer from Purdue University and the CME Group. The barometer is sporting a reading of 99, down from 121 the month prior and only the ninth time the score has read below 100 since data collection began in the fall of 2015. The barometer's indexes of current and future expectations both fell more than 20 points as a rising percentage of producers feel their farm is worse off financially now compared to a year earlier.
“Despite strong commodity prices, this month's weakness in producers' sentiment appears to be driven by the rapid rise in production costs and uncertainty about where input prices are headed,” Jim Mintert, the barometer's principal investigator and director of Purdue University's Center for Commercial Agriculture, said in a release. “That combination is leaving producers very concerned about their farms' financial performance.”
According to the barometer, 38% of producers in May said they expect their farm’s financial performance to worsen this year. That’s a stark contrast to May 2021, when 42% of respondents expected better financial performance; the barometer’s Index of Farm Financial Performance has fallen 41% below the high it set in April 2021.
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Producers continue to eye higher input costs as the biggest issue facing their operations, and 57% expect their production costs to rise 30% or more this year.
While price remains a concern, availability of inputs was reported to have improved in the May survey; some 19% of respondents said they had “difficulty purchasing crop inputs for the 2022 crop season” in May compared to an average of 32% who reported difficulties in the surveys conducted from December through April.
The May figures were based on a telephonic survey of 400 producers conducted May 16-20, 2022.
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